Accounting

Accounting Question

Q uestion

Proforma statements analysis

Description:

Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).
Using the sample financial statements, create pro forma statements of five year projectionsthat are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.
Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.

Write a 350 - 700 word analysis of the company's short term and long term financing needs and determine strategies for the company to manage working capital.

XYZ Company, INC. 

Profit and Loss Statement 

Year Ended December 31, 20XX

 

 

 

Sales

1,750,450

%

 

 

 

Returns and allowances

2,752

 

 

Net Sales

 

1,747,698

100.0

 

Cost of Sales

 

 

 

Beginning Inventory

50,000

 

 

Purchases

610,162

 

 

Production Labor

420,108

 

 

Ending Inventory

30,000

 

 

Total Cost of Sales

 

1,050,270

60.1

 

 

 

 

 

Gross Profit

 

697,428

39.9

 

Selling Expense

 

 

 

Wages

75,000

 

 

Commissions

25,000

 

 

Marketing

25,000

 

 

Total Selling Expenses

 

125,000

7.2

 

Operating Expense

 

 

 

Salaries

225,000

 

 

Payroll taxes

29,000

 

 

Benefits

27,000

 

 

Office Supplies

500

 

 

Postage

250

 

 

Professional Fees

2,000

 

 

Telephone

850

 

 

Utilities

950

 

 

Training & Education

250

 

 

Miscellaneous

50

 

 

Total Operating Expense

 

285,850

16.4

 

Operating Profit—EBITDA

286,578

16.4

 

Other Income (Expense)

 

 

 

Interest

(9,650)

 

 

Depreciation

(12,000)

 

 

Amortization

(2,500)

 

 

Total Other Income (Expense)

 

(24,150)

 

 

Total Pre-tax Profit

262,428

15.0

 

Income Tax Allowance

118,093

 

 

 

 

 

 

Net Profit

 

144,335

8.3

 

XYZ Company, INC.

 

Balance Sheet

 

For Year Ending December 31, 20XX

 

ASSETS

 

Current Assets

 

Cash

10,525

Accounts Receivable

27,000

Inventory

30,000

Prepaid Expenses

2,000

Total Current Assets

69,525

Fixed Assets

 

Property—net of depreciation

215,000

Equipment—net of depreciation

80,000

Vehicles—net of depreciation

5,000

Total Fixed Assets

300,000

Total Assets

369,525

LIABILITIES

 

Current Liabilities

 

Revolving lines of credit

20,000

Accounts Payable

5,000

Current Portion of Long-term Debt

15,000

Total Current Liabilities

40,000

Long-term Liabilities

 

Long-term debt and capital leases

45,500

Loans payable to stockholders

60,500

Total Long-term Liabilities

106,000

Total Liabilities

146,000

Stockholders Equity

 

Common stock

1,000

Additional Paid-in Capital

25,000

Retained Earnings (Cum from prior years)

53,190

Retained Earnings (From current P&L)

144,335

Total Stockholders Equity

223,525

Total Liabilities and Stockholders Equity

369,525

 

 

 

 



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    Accounting

    Submitted by PROFSTAN on April 26th, 2016 13:27

    Price $30.00

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